Focus on Nifty & IT; ignore banks: Sukhani

In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani of s2analytics.com shared his reading and outllook on the market.

Market's complacency scary; 5500 bottom for Nifty: Ambit Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: The big star last week was the Bank Nifty, up more than 4 percent. How would you trade that? A: The big star is likely to be subdued this week. I would be a buyer on indices whether it is IT, Nifty or the Bank Nifty. However, my focus would be on IT and the Nifty as well as on the other components without the banks. I would expect the Bank Nifty to take a laidback approach this week and the other stocks and the Nifty to move ahead. The trend is up but opportunities would be coming. Q: Bata India has come back in your buy list. A: Yes. It came when it was making a double bottom and that double bottom was confirmed. Now at Rs 800 it is again making small consolidation and likely to breakout of that consolidation. Once an uptrend starts the consolidations gets dissolved in the direction of the upmove. Therefore, I would be a buyer in Bata India. One has seen how strong the momentum was and after a deep correction that momentum is coming back. Q: You think IVRCL will continue to see momentum? A: It does appear so. IVRCL is now breaking out of two month trading range. It was bouncing from the lower end to the higher end and that higher end resistance is now giving way. Breakout usually gives more momentum on the upside. I think there is some momentum broadly in infrastructure. Therefore, IVRCL is a buying opportunity for the day and probably for the week also. Traders must understand that IVRCL is not an investment buy. It is just a momentum play and that is how it should be treated. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Century Textiles and Industries is in your buy list today? A: Yes. Century Textiles has gone through a bear market. It has completed that and now it is making a pattern of higher highs-higher lows. A small correction suggests that a small dip is over, a cooling off process has started, which is done with. New levels on the higher side should now come. Century Textiles, Bombay Dyeing and Manufacturing Company, Raymond, all of them have reversed and are now on a strong bullish phase. Q: How would you trade Sintex Industries? A: Sintex is a classical textbook chart. It bottomed out then it started making higher highs-higher lows then it had a small correction just now and that correction stopped almost exactly at the support levels, it is perfect. We want to buy it. The correction has stopped. We saw good run up on Friday and that should now continue and make new highs for this upmove. It is a perfect opportunity to go long for the short-term trader, in fact if it works out today, carry it for tomorrow.  Q: You have a sell call on Tech Mahindra? A: Tech Mahindra has been a very disappointing chart. It is in a trading range, Rs 925-975. It is now at Rs 925 so the signs are that it is breaking down. It is surprising but whatever it is the idea is that if the market takes momentum slowly, if they go up slowly then there will be a lot of opportunities to go short also in a slow moving market. Tech Mahindra now qualifies as a distinct short selling idea, anything below Rs 925, consider going short.   Q: You are also short on Future Retail today? A: Yes. Future Retail has a disappointing chart. I have been upbeat but that has not worked out. At Rs 150 Future Retail is also in a trading range like Tech Mahindra and is willing to breakdown. It is underperforming. The Nifty is roaring up while this is in a range, not willing to go higher. It is on the lower end of a range. So, anything below Rs 150 in Future Retail is suggesting a sell. So, there are short selling ideas and these ideas should be used when the levels I have discussed are broken but they should work out. Q: It looks like we may have a quiet start? A: Yes. However, one should still be a buyer. If one has strong positions then hold on to them otherwise look for intraday corrections and buy.  _PAGEBREAK_ Q: How would you trade Bharat Heavy Electrical (BHEL)? A: It is a buying opportunity but after Friday’s big move one cannot run after it but if there is any kind of mild setback or a correction then it is a buy. Q: How is DLF looking from real estate space? A: DLF is a better chart. DLF can be bought into. It is breaking out from a trading range making a base breakout. It is attractive. Q: How about NMDC technically? A: It is a very poor chart. It is now likely to make new lows in a roaring bull market. It is a short sell or avoid. Q: Your views on Ambuja Cement? A: I would be a buyer in Ambuja Cement. Like DLF, it is on the verge of breakout. It is something one can consider today also. Q: What about HCL Technologies chart from IT sector? A: It is a slightly choppy chart but HCL Tech’s strength is behind it, in the sense one cannot say that this strength is finished so I would be a buyer after this sharp correction in HCL Tech. if it does not work out, it does not. Q: How would you trade Adani Ports and Special Economic Zone? A: Adani Ports is a buy. It has confirmed a fairly decent intermediate term bullish pattern but it has seen three big days of gains. Therefore, wait for it to consolidate and then buy it. It is heading much higher. Q: Would you take profits or look to take profits at any particular level of the Nifty and where would have trailing stop losses would have risen to now? A: There is no level because this market is going up without any consideration of levels so I am not looking at any number and the trailing stop is the best way to capture a big move. So the trailing stop today comes to 6,150 and then we will see where it goes. Hopefully we will keep on trailing it everyday.